×

Sturm, Ruger Defends Its ‘Lawful’ Products



Valley News Business Writer
Friday, March 16, 2018

Newport — Sturm, Ruger & Co. this week defended its record on firearms safety to its largest shareholder — a powerful Wall Street investment firm — and rebuffed any suggestion that it stop making semiautomatic rifles that look like assault weapons in the wake of the Parkland, Fla., high school shooting that killed 17 people last month.

In a five-page letter sent to shareholders, the Newport gunmaker said it would not bow to “political pressure to do what is expedient” by discontinuing manufacture of what it calls “modern sporting rifles” that are designed to look like military assault weapons and which automatically reload with another round after each pull of the trigger.

The letter, signed by Ruger CEO Chris Killoy and Chairman Michael Jacobi, was sent to shareholders after the company was contacted last month by the giant New York investment firm BlackRock, which indirectly owns about 17 percent of Ruger’s stock, asking the gunmaker to assess “the financial, reputational and litigation risk of the various aspects of your product lines” and how they are distributed.

BlackRock CEO Larry Fink wrote that it was reaching out to Ruger and two other gunmakers in which the investment firm holds stakes as a fiduciary for clients.

He said BlackRock believes the key for companies to prosper is for them to understand the “societal impact” of their business and how it affects their “potential for growth.”

Ruger, seeking to “plainly and directly” reply to the concerns raised by BlackRock, said in the letter that its line of semiautomatic rifles and pistols “are used and enjoyed by law-abiding citizens for a variety of purposes every day” and such users should not be “stripped of their constitutional rights due to the criminal and heinous actions of a few individuals.”

The company emphasized its safety standards and commitment to regulatory compliance as evidence it takes gun violence seriously, but dismissed calls to adopt so-called “smart gun” technology designed to prevent the unauthorized use of guns because it has “proven unreliable, easily defeated, or both.”

Ruger said that “rifles of all types, including modern sporting rifles, are involved in a small fraction of criminal activities,” based upon FBI data. Noting that an estimated 16 million semiautomatic guns have been sold since 1990, “their legitimate uses by responsible citizens far outnumber their misuses by criminals, who clearly have serious mental health issues that should prevent them from possessing any firearm,” Ruger said.

Instead, Ruger pointed out it has “long supported efforts to better enforce existing laws” and “industry initiatives” relating to keeping guns out of the wrong hands by encouraging states to report to the National Instant Criminal Background Check System records that identify people who are barred from owning a gun under current law and efforts by retailers to deter “straw purchases” of guns.

Following the mass shooting at the Florida high school, Dick’s Sporting Goods said it no longer would sell assault-style rifles and was raising the age to buy a firearm to 21. And Walmart, which stopped selling the military-style semiautomatic AR-15 in 2015, also announced it no longer would sell firearms and ammunition to people under 21.

Although semiautomatic firearms have existed for generations in all calibers and models — one of the first firearms Ruger co-founder Bill Ruger created was the semiautomatic standard pistol in 1949 — much of the current controversy surrounds the “AR” platform, which is designed to look like military-grade weapons but lacks full automatic-fire capability.

The “AR” stands for ArmaLite, after the company that developed it in the 1950s, not “assault rifle” or “automatic rifle,” as is commonly assumed.

Ruger makes three AR-platform semiautomatic rifles designed in appearance to resemble modern military assault weapons: the AR-556, which retails for $799, the AR-556 Takedown which costs $2,199 and the SR-762 which sells for $2,349, according to the company’s website.

Ruger doesn’t disclose in its public financial statements unit sales by individual gun model, but in its shareholder letter noted that the company currently makes about 40 “major product families in the rifle, pistol and revolver categories.”

But the AR’s often described “cosmetic” resemblance to military assault weapons is nonetheless enough to keep one Upper Valley firearms retailer from displaying the model on his store shelves.

Wayne Barrow, owner of Barrows Point Trading Post in Quechee, said he doesn’t stock AR-platform firearms because “I’ve been broken into three or four times and that’s the gun they want. I’m just not comfortable with those being here if someone breaks in.”

He attributed interest by bad actors in AR-platform guns to their depiction in “graphic movies” and television. “Some of our younger people are very easy to impress,” Barrow said.

If a customer wants an AR-platform gun, Barrow said he will special order it. But even then he said he doesn’t get many orders for the model — most of his customers are sportsmen and hunters, he explained, and few of them would use an AR-platform gun for hunting.

In its shareholder letter, Ruger batted down concern from BlackRock that companies need to take into account the “societal impact” of their products in order to prosper in today’s complicated marketplace where myriad factors weigh on the outcome of their business.

“We manufacture a lawful product, the ownership of which is constitutionally protected,” Killoy and Jacobi wrote.

“Our business model has been consistent since the inception of the company nearly 70 years ago. We therefore do not believe that our lawful manufacturer, distribution and sale of firearms carries any financial or reputation risk outside of those set forth” in the company’s public financial reports.

“Moreover, many of the proposals being advanced, while well-meaning, run counter to what our customers actually want,” the letter said.

John Lippman can be reached at jlippman@vnews.com.